Hurricane Katrina places workforce training funds in peril

After wrangling with state lawmakers on an annual basis for sufficient workforce training funds through general budget negotiations, industry leaders were thrilled when, earlier this year, the Mississippi Legislature created an annual $20 million pot of money earmarked for community college workforce training programs designed to keep unemployment low.

All summer, business leaders have been mulling how to slice the bigger workforce training money pie. But because Hurricane Katrina put thousands of people out of work and unemployment claims are pouring in, workforce training funds may be in jeopardy and businesses may soon have to pay a higher unemployment tax.

Mississippi unemployment claims are paid from the Unemployment Security Trust Fund, which has a balance of approximately $729 million. But if the fund falls below $500 million, the new workforce training money would be cut off, and unemployment tax would rise from 5.1% to 5.4%, the amount businesses were paying pre-legislation. By comparison, the State of Louisiana has nearly $1.5 billion in its trust fund and, based on claims, could run dry in less than 90 days.